Fuel prices set to rise despite falls in May
The price of fuel could be set to rise despite continued drops in May, according to new data.
The average price of a litre of unleaded fuel fell below 106p in May, and it’s the first time that the price has fallen to this level in more than four years, according to RAC Fuel Watch.
As lockdown measures were lifted, the cost of refuelling an average 55-litre family car with petrol fell by £1 to £58.20 on average as the total cost of fuel fell by more than three pence.
It dropped from 108.95p at the start of May to 105.81p at the end of the month.
There was also a drop in the price of diesel, which fell from 114.54p to 111.23p during the same period.
However, despite this sustained fall in prices, it’s likely that they won’t be here to stay, as the RAC predicts that a rebound in the cost of oil could result in prices rising.
A barrel of oil was up by $15.59 during the month to $34.44 a barrel, resulting in an increase in the price of wholesale fuel by seven pence for petrol and 4.5p for diesel. It’s more than likely that these hikes in wholesale prices will be passed on to the consumer.
RAC fuel spokesman Simon Williams said: “There’s no doubting that, as the lockdown is eased slightly in different parts of the UK and drivers begin to travel more often, it’s currently cheaper to fill up now than it has been since 2016
“How long these lower pump prices remain for however is debatable and is largely dependent on events taking place thousands of miles away from the UK. The impact of the coronavirus on world travel and economic activity has dramatically reduced the global demand for oil, which is forcing major oil producing nations such as Saudi Arabia and Russia to desperately agree production cuts to shore up the barrel price.
“How far they go with these cuts, and how quickly, will be crucial in determining what happens with prices at the pumps over the next few months. Last month, as we expected, the oil price began to creep back up. If this continues in June, a rise in the cost of filling up is almost inevitable.”